Google CEO Sundar Pichai highlighted an opportunity for the company to further expand its dominant mobile search business by better addressing local queries, as parent company Alphabet churned out another quarter of double-digit revenue growth.
Alphabet revenue rose 21 per cent year-on-year to $33.7 billion in Q3 driven by mobile search, while profit jumped to $9.2 billion from $6.7 billion in Q3 2017.
Google’s advertising division was once again the primary revenue generator for the company, raking in nearly $29 billion. Pichai said on an earnings call the company is eyeing localisation as a key opportunity to drive future revenue growth.
“I wouldn’t underestimate the focus we have,” Pichai commented, noting local mobile searches have grown more than mobile searches overall and increased more than 50 per cent year-on-year.
Pichai also addressed Google’s new app licensing scheme, stating it is too early to tell what kind of impact it will have on revenue. He added it’s “difficult to predict how the licensing model will be adopted”, but highlighted the popularity of Google apps among users.
CFO Ruth Porat said Google’s line of hardware, which includes its Pixel phone and Google Home, was only a “modest contributor” to revenue in Q3 due to the introduction of refreshed models earlier this month.
With each generation of new devices, Pichai said Google is working to scale its hardware operation, particularly with the Pixel smartphone .
“There are the gating factors to ramp this up. First of all is to be able to build the supply we need. The second is go-to-market, getting ourselves in as many locations in retail as possible, in as many countries as possible, with as many carrier certifications as possible. So in each of those dimensions we are making progress.”
The Q3 report capped a contentious period during which the company faced controversy related to its development of a censored search app for China and decision to charge licensing fees for its Android apps in Europe.
Just before the earnings call on 25 October, The New York Times reported Google concealed sexual misconduct allegations against former executive and Android creator Andy Rubin before his departure from the company in 2014.
Rubin took to Twitter to argue the report “contains numerous inaccuracies about my employment at Google and wild exaggerations about my compensation”.